Thursday, May 19, 2022
ISLAMABAD: Pakistan's economy grew 5.97% — after rebasing national accounts — in the ongoing fiscal year ending June 30, 2022, slightly faster than the 5.74% in the last year, The News reported, citing the government.
For the ongoing fiscal year 2021-22, the provisional GDP growth rate has been estimated at 5.97%, with the growth of the agricultural, industrial, and services sectors at 4.4%, 7.19%, and 6.19%, respectively. Several independent economists pinned the higher GDP numbers on imports and consumption-led growth.
Pakistan’s GDP at current market prices has reached Rs66.949 trillion in 2021-22, resulting in an increase in per capita income from Rs268,223 in 2020-21 to Rs314,353 in 2021-22. In US dollar terms, the per capita income increased from $1,676 in 2020-21 to $1,798 in 2021-22.
The National Accounts Committee (NAC) met under the chair of the federal secretary of planning and approved rebasing of national accounts from the fiscal year 2005-06 to 2015-16. The forum also approved a revised GDP growth figure of 5.74% for the last fiscal year 2020-21 and a negative 0.94% for 2019-20.
Following the meeting, the federal secretary ministry of planning told journalists that they had directed the Pakistan Bureau of Statistics (PBS) to authenticate the methodology of calculating the GDP growth figures. He also made it categorically clear that there was no pressure on them from the minister of planning.
Independent economists, however, termed it as low quality but higher growth, which did not help add more job opportunities.
Former finance minister Shaukat Tarin said that 6% of GDP growth in 2022 “is a slap in the face of Pakistan Democratic Movement (PDM) who called us selected and incompetent”.
“Such performance after COVID is spectacular. Bravo leadership of Prime Minister Imran Khan and the PTI economic team,” Tarin said in a tweet. “PDM now try to match our performance”.
Meanwhile, Planning Commission’s Chief Economist Dr Mohammad Ahmed Zubair resigned from his position, allegedly because of differences in the GDP growth figures.
Zubair said: “I would like to state that the PBS has the mandate to estimate National Accounts and that the Ministry of Planning, Development and Special Initiatives has no role in matters related to estimating the GDP growth. In this regard, I wish to categorically state that there was no influence exercised on me from within the Ministry of Planning, Development and Special Initiatives on matters related to National Accounts for FY22.”
Pakistan’s growth trajectory has often been described as a “boom and bust cycle” in the last many decades. A higher growth rate always resulted in creating imbalances such as higher budget and current account deficit. The growth rate has never been sustained for long.
Imports have been projected to stand at $75 billion against initial estimates of $55 billion, which contributed almost 1% of GDP, jacking up the overall growth rate.
Apart from the expansionary fiscal and monetary policies fuelling higher growth, the economy has been brought to the brink of insolvency on repayments of its foreign loans and obligations. Pakistan and the IMF have kick-started parleys in Doha (Qatar) for reviving the stalled IMF programme under the $6 billion Extended Fund Facility (EFF).
The overall industrial sector showed an increase of 7.19% provisionally.
|Major Contributors||In percentage terms|
|Iron and steel products||16.55%|
Meanwhile, value-added in the construction industry, mainly driven by construction-related expenditures by industries, registered a modest growth of 3.14% due to an increase in general government spending;
This moderate growth rate is due to an unusual increase of 30.1% in relevant deflator i.e. wholesale price index building material.
The services sector grew 6.19%, and the wholesale and retail trade industry grew 10.04%; it is dependent on the output of agriculture, manufacturing and imports.